Eskom and Zululand Energy Terminal sign heads of agreement

Both Eskom and Zululand Energy Terminal reaffirm their commitment to progressing the necessary regulatory approvals, long-term commercial contracting approach and structuring, and infrastructure development required to bring the project to fruition. ZET, a joint venture between Vopak Terminal Durban, owned by Royal Vopak (a company with its head office in the Netherlands) and Reatile Group Proprietary Ltd, a South African company, and Transnet Pipelines (a division of Transnet SOC Ltd), was awarded a concession by Transnet National Ports Authority (TNPA) to develop, construct, operate, and maintain the LNG terminal.

This partnership represents a significant step in advancing South Africa’s gas infrastructure ecosystem and supports national efforts to diversify energy supply, strengthen energy security and enable economic growth. Backed by the Ministry of Electricity and Energy, the Ministry of Transport and Transnet, the project will help facilitate gas-to-power development, providing the flexible and dispatchable generation capacity required to complement renewable energy, maintain grid stability, and support the country’s long-term energy transition.

Eskom’s Richards Bay 3000 MW gas-to-power project is to be constructed and operated in the Richards Bay Industrial Development Zone (RBIDZ), in KwaZulu-Natal.

The Eskom Richards Bay Project envisages the importation and consumption of regasified LNG as the primary fuel source of the power plant. The lifecycle of the power plant is expected to be 25 years and the power plant is planned to operate primarily as a mid-merit plant. It is designated as a Strategic Integrated Project in terms of the Infrastructure Development Act 23 of 2014 and by the Integrated Resource Plan (IRP) 2025.

The project will be developed through a private sector participation (PSP) model, leveraging strategic partners, project finance, and long-term power off-take arrangements. The downstream power plant represents a large scale capital investment, attracting international capital and accelerating industrial development within Richards Bay.

“Gas is being used as a bridge fuel to support the transition to a low-carbon energy system. These gas plants are designed to complement intermittent renewable sources like solar and wind, ensuring reliable 24/7 power, while clean energy technologies are being developed and introduced onto the grid. The availability of dispatchable power is at the very heart of the energy transition and industry can-not operate without it as it forms the backbone for renewable energy integration into the grid. Securing ‘foundation customer’ status at the Zululand Energy Terminal provides a critical enabler for our 3000 MW gas programme, with the intention of a long-term contracting approach to minimise volatility and support system reliability while aligning with the IRP 2025 objectives,” said Eskom’s Group Chief Executive, Dan Marokane.

“Today’s signing marks a significant milestone for ZET as we advance our role in supporting South Africa’s energy future. As one of our anchor customers, Eskom’s participation demonstrates growing confidence in LNG as an enabler of energy security, grid stability and industrial growth. This agreement strengthens the commercial foundation of the terminal, and we look forward to building a long-term partnership as we progress towards a terminal use agreement, financial close and the delivery of South Africa’s first LNG import terminal,” added Zululand Energy Terminal Director and Project Owner, Oliver Naidu.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/08062026/eskom-and-zululand-energy-terminal-sign-heads-of-agreement/